[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 18 November 2005, 14:05 GMT
Swiss Re to buy GE insurance firm
Swiss Re building in London
The Swiss Re building is one of London's most recognisable
Reinsurer Swiss Re has agreed to pay $6.8bn (4bn) for the insurance unit of industrial giant General Electric.

Swiss Re will sell $7.5bn of new shares to finance the acquisition and cover the debts of GE Insurance Solutions.

Buying the firm will turn Swiss Re into the world's largest reinsurance company at a time when premiums are set to rise following problems such as hurricanes.

Analysts say the sale will allow General Electric (GE) to focus on quicker growing areas of business.

Uneasy fit

"Insurance Solutions has been a tough strategic fit for GE," said company chairman and chief executive Jeff Immelt.

"Over the last five years, the Insurance Solutions business has lost $700m and required the infusion of $3.2bn of capital."

GE, the world's largest company by market value, has been cutting its insurance operations and already has sold units to firms including Warren Buffett's Berkshire Hathaway.

Unsurprisingly, Swiss Re's chief executive John Coomber was more flattering about the company he was buying, saying Insurance Solutions was a "powerful business fit offering tremendous opportunities to strengthen our franchise".

The company is based in Kansas City, Missouri, and had net premiums of $6.2bn last year. At the end of June, the it had assets worth a total of $41.5bn.


SEE ALSO:
Hurricane damage 'to total $60bn'
02 Nov 05 |  Business
Big rise in Katrina cost forecast
13 Sep 05 |  Business
Disasters 'cost $123bn in 2004'
01 Mar 05 |  Business
Disaster claims 'less than $10bn'
28 Dec 04 |  Business
Munich Re losses persist
02 Jun 03 |  Business
Swiss Re profits soar
29 Aug 03 |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific